DIRECTORS' REPORT Dear Members, Your Directors have pleasure in presenting the 29thAnnual Report on the business and operations of the Company for the Financial Year ended 31st March, 2015. Dividend: The Directors have recommended a dividend @ Rs. 0.20 per equity share of Rs. 2/- each for the approval of Shareholders at the ensuing Annual General Meeting. Management Discussion and Analysis: (a) Industrial Structure and developments : Indian Textiles Industry has an overwhelming presence in the economic life of the country. Apart from providing one of the basic necessities of life, the textile industry also plays a pivotal role through its contribution to industrial output, employment generation and earnings of the country. It contributes about 14% to India's industrial production and 13% to the country's export earnings. The textile sector is one of the largest provider of employment along with agriculture. The Indian textiles industry represents a widely diverse spectrum of activities with the hand-spun and handwoven sector at one end, and the capital intensive sophisticated mill sector at the other. The decentralized power looms, hosiery and knitting sectors form the largest section of the Textiles Industry. The close linkage of the Industry to agriculture and the ancient culture, and traditions of the country make the Indian textiles sector unique in comparison to the textiles industry of other countries. This also provides the industry with the capacity to produce a variety of products suitable to the different market segments, both within and outside the country. The Indian textiles industry, currently estimated at around US $108 billion, is expected to reach US $ 141 billion by 2021. The industry is the second largest employer after agriculture, providing direct employment to over 45 million and 60 million people indirectly. The Indian Textile Industry contributes approximately 5 per cent to GDP, and 14 per cent to overall Index of Industrial Production (IIP). Apparel exports from India have registered a growth of 17.6 per cent in the period April—September 2014 over the same period in the previous financial year. (b)Opportunities and Threats The current market scenario provides good opportunities for growth. There is a Large, Potential Domestic and International Market for the textile industry. The market is gradually shifting towards Branded Readymade Garment and currently we are one of the major player in this sector. The Company is planning to focus more on the ready made garment business and are hopeful to achieve growth in that sector. The increased disposable income and purchasing power of indian customer opens the doors for growth. This more so with the emerging retail industry and malls provide huge opportunities for the apparel, handicraft and other segments of the industry. There is greater Investment and FDI opportunities available. The challenges faced are the Competition from other developing countries. Then to make a balance between price and quality is also a big challenge faced by the Industry. The Cost of production is going up there is a huge capital requirement for new products. There is a threat from the unorganized sector also. These Concerns need to be taken care of and improve productivity continuously. (c)Segment wise or Product wise performance The Company has two reportable primary business segment viz.,Manufacturing and Dealing in Textiles and Rental Property. The same has been reported in the notes to the accounts. (d)Discussion on Financial performance with respect to operational performance. The company reported a turnover of Rs.51,633.07 Lacs during the year 2014-15 against a turnover of Rs. 47,237.91 Lacs in the previous year. There was a growth of 9.30% in the revenues of the Company as compared to the previous year. The Company clocked in a PAT of Rs. 773.48 Lacs during the year 2014-15 resulting in a growth of 107.59% as compared to previous year. (e)Human Resource Management The Company has employee friendly HR policies and attracts the best talent in the Industry. The attrition rates are quite low. The Company's policy of providing on the job training has been instrumental in developing a good work force for the Company. Corporate Governance Report: A detailed report on Corporate Governance Report forms part of this Report. Auditors Certificate on compliance with Corporate Governance requirements by the Company is attached also forms part of this report. Directors' Responsibility Statement: In terms of section 134 (3) (c) of the Companies Act, 2013 your Directors state that: 1.In preparation of annual accounts for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any; 2.They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and profit for the year ended on that date; 3.They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; 4.They have prepared the annual accounts ongoing concern basis; 5.They have laid down proper internal financial controls to be followed by the Company and they were adequate and operating effectively and 6.They have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively. Deposits: During the financial year under report the Company has not accepted deposits within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. Particulars of Loans, Guarantees and Investments: Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. Directors: Mr. Ajay Agarwal retires by rotation at the ensuing Annual General Meeting in terms of Section 152 of the Companies Act, 2013. The Act provided that Independent Directors are not subject to retirement by rotation. The Board of Directors have appointed Mrs. Neena Agarwal (DIN 00454717) as Director on 30th March, 2015 and Mrs. Medha Pattanayak (DIN 07157952) as an Independent Director on 5th May, 2015. Familiarization Programme for Directors: At the time of appointment a Director, a formal letter of appointment is given to him/her. The Director is also explained in detail the role, function, duties and responsibilities expected from him/her and also compliance required from him/her under the Companies Act, 2013 and Listing Agreement with stock exchanges. Further the Chairman or Managing Director also will have one to one discussion with the newly appointed Director to familiarize with the Company's operation. Performance of Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out annual performance evaluation of its own performance, the Directors individually, as well as the evaluation of the working of its committees. A structured questionnaire is prepared after taking into consideration inputs received from the directors covering various aspects of the Board's functioning. The evaluation was done on various parameters like vision and strategy, Board participation disclosure of interest, review of risk management policies, leadership skills, good governance, marketing and corporate communications etc. Risk Management: The Company has adopted a Risk Management Policy for the Company including identification therein the elements of risk, if any, which in the opinion of the Board may threaten the existence of the Company. After identifying the risk and assessing the level of impact, controls are put in place to mitigate the risk by the concerned executives who are responsible to control the exposure of the risk and balance the impact of risk on a continuous basis. Independent Directors Meeting: During the year under review a meeting of Independent Directors was held on 6th March, 2015. Related Party Transactions: All related party transactions that were entered into during the year under review were on arm's length basis and in the ordinary course business. The Audit Committee has approved the related party transactions and subsequently the same were approved by the Board of directors' Auditors: M/s. M.L.Bhuwania & Co. are appointed as Statutory Auditors to hold office from the conclusion of 28th Annual General Meeting to the conclusion of 31st Annual General Meeting (Subject to ratification of the appointment by the members at every Annual General Meeting). A proposal for ratification of the appointment of Statutory Auditors for the financial year 2015-16 is placed before the members at the ensuing Annual General Meeting. The Auditors have given their eligibility certificate in terms of Section 139 of the Companies Act, 2013. Whistle Blower Policy: Company has a Whistle Blower Policy to report genuine concerns or grievances. The same is explained in the Corporate Governance Report. No person has been denied access to Audit Committee. Corporate Social Responsibility: As a part of its initiative under the 'Corporate Social Responsibility' (CSR) drive, the Company has undertaken project in the area of rural development, Promoting health care, education etc.. These projects are in accordance with Schedule VII of the Companies Act, 2013 and the Company's CSR Policy. The report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out as Annexure A-forming part of this report. Cost Auditors: The Board of Directors at its meeting held on 30th May, 2015, on the recommendation of the Audit Committee, appointed Y. R. Doshi & Co., (Firm Registration No. 000003) Cost Accountants, Mumbai, as Cost Auditors for undertaking Cost Audit of the Cost Records maintained by the Company for the Financial Year 2015-2016 at a remuneration of Rs. 1 lacs (Rupees One Lacs Only) plus service tax as may be applicable and out of pocket expenses at actual. The said Auditors have given their eligibility certificate for appointment as Cost Auditors. The remuneration payable to the said Cost Auditors needs to be ratified by the Shareholders at the ensuing Annual General Meeting. Secretarial Audit: Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made there under the Company has appointed Mr. Yogesh Sharma, a Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as part of this Energy Conservation, Technology Absorption: Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgoings. A. Conservation of Energy: (a)Energy conservation measures taken Regular monitoring of consumption, optimization of production facility, proper maintenance of machines (b)Additional investments and proposals if any, being implemented for reduction of consumption of energy Nil (c)Impact of the measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods .Improvement in quality and efficiency in production. (d)Total energy consumption in units Total Energy Consumption of 29,248,282 Units. (e) Consumption per unit of production as per Form A of the Annexure in respect of industries specified in the Schedule thereto. 0.67 per unit of Fabric Production 1.32 per unit of Yarn Dyeing Production 0.15 per unit of Fabric Processing B. Technology absorption: (a) Efforts made in technology absorption as per Form B of the Annexure At present not required. C. Foreign exchange earnings and outgoing: (a) Activities relating to exports, initiatives taken to increase exports, development of new export markets for production and services and export plans. The Company is regularly developing new designer suiting and shirting fabrics as per latest trends in markets to export all over the world especially to the new markets. The Company has also taken initiative in exporting cotton fabrics Particulars of Employees and related disclosure: Particulars of Employees and related disclosure: There are no employees drawing a monthly or yearly remuneration in excess of the limits specified by the Companies Act 2013 and Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Acknowledgement: Your Directors acknowledge the support and counsel extended by the bankers, government agencies, shareholders, investors, employees and others associated with the Company. The Directors look forward the same in future also. For and on behalf of Board of Directors Mr. Vishwanath L. Agarwal Chairman Place Mumbai date : 30th May, 2015 |